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Apple commands 73%, Samsung captures 26%

It's no secret that Samsung and Apple are dominating the smartphone market. According to IDC's figures for Q1 2012, Samsung had a 29.1 percent share of the worldwide smartphone market while Apple was not far behind with 24.2 percent.
With Samsung and Apple together commanding over 50 percent of the smartphone market, you would expect for them to take home a healthy portion of profits as well. While this is true, according to Asymco, the disparity between the profits reaped by Samsung and Apple compared with the also-rans in this sector is astonishing.

[Source: Asymco]

According to Asymco, the pair accounts for 99 percent of worldwide mobile phone operating profit. Samsung is using its nearly 30 percent share of the smartphone market to obtain 26 percent of the profits.
However, the biggest winner is Apple, which is pulling in an estimated 73 percent of the profits from the mobile market. Apple's performance shouldn't come as a surprise to many considering that the company pulled in $11.6 billion in profits during the first quarter (fiscal Q2).
HTC barely made a blip with just 1 percent of operating profits. LG, Motorola, Nokia, RIM, and Sony have all posted losses with regards to their respective mobile phone divisions, so they don't even factor into this equation.

Samsung Galaxy S III
"Seen this way, the story isn’t so much that Apple 'took the profits from the incumbents'", stated Horace Dediu of Asymco. "Rather, it’s that Apple created a vast new pool of profits. And one need not look far to find out where they came from: operators. These profits were mostly carrier premiums for the iPhone 4S."

Source: Asymco

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RE: Mick!
By superstition on 5/4/2012 3:37:18 PM , Rating: 3
"Apple's contracts are among the most favorable (for it) in the industry and the most unfavorable for manufacturers. But the company's massive unit business is too lucrative for Foxconn et al. to pass up, so they look for creative ways to make up the cost gap, like making their employees work long hours of unpaid overtime."

Have you heard (via Wikileaks) about how the US pressured Haiti to make an exemption to a minimum wage increase for its corporations such as Levi Strauss and Hanes:

Apple is certainly not the only company that likes to exploit workers. Also, since Foxconn supplies parts for many other large companies, does the company only exploit the workers making products for Apple?

RE: Mick!
By JasonMick on 5/4/2012 3:58:33 PM , Rating: 2
Apple is certainly not the only company that likes to exploit workers. Also, since Foxconn supplies parts for many other large companies, does the company only exploit the workers making products for Apple?
I never said that Apple is Foxconn's only client, I've merely noted the well known fact that Apple's contracts on a per-unit basis are some of the least favorable for Foxconn and other suppliers.

This has long been lauded (Apple's low production costs), but the flip side of the coin is that the supplier is getting less money so it tries to take it out of the employeees' hide (i.e. force them to work unpaid overtime, etc.).

Again I'm not suggesting Apple is the only culpable party here, I'm merely pointing out that its demands for the cheapest product costs in the industry create an atmosphere that's more conducive to accelerating the rate of occurrence of certain types of labor abuses.

I agree this is a problem the industry as a whole will have to face, though.

And I also think it's important to remember that for all the bad, there's a lot of good to the high tech manufacturing industry in China. After all, working in rice paddies or back-breaking traditional crafting industries isn't arguably less safe than its modern high-tech labor replacement. And high-tech labor has undeniably brought more wealth into China, though some have profited more than others.

While a Chinese laborer still can't afford to buy the iPads they produce, at least they can acquire some basic modern luxuries like a working mobile phone of some sort.

I'm glad you asked the question, though, because I think my view is broader and more considered than some would give me credit for by looking to quote-mine certain pieces of my commentary.

Chinese labor is a complex beast -- particularly when it comes to Apple.

That said, some of Apple's abuses (tax evasion, markups) are much more cut and dry, though again, it's only exploiting the willing, as I say in my original remark.

RE: Mick!
By EnzoFX on 5/4/12, Rating: 0
RE: Mick!
By EnzoFX on 5/4/12, Rating: 0
RE: Mick!
By JasonMick on 5/4/2012 4:32:54 PM , Rating: 2
Quite complex, which is why I don't understand the point in arguing that Apple may be getting away with more than others. Why single them out over and over again, as opposed to actually going at the root of the problem?
I'm all about getting to the root of the problem too. Hence why I cover a variety of Chinese labor issues throughout my time here (not just Apple).

Apple is just an iconic example as the world's biggest tech company in terms of market cap and profits.

RE: Mick!
By menting on 5/4/2012 4:11:06 PM , Rating: 3
apple's not the only one, but they are the worst one.
Our company chose NOT to do business with apple, because our CEO said that we'd never make any money working with apple; they take almost all the profits. We make more profit allocating our products for other companies that use our stuff.

RE: Mick!
By superstition on 5/7/2012 12:56:52 AM , Rating: 2
The implication is that Apple is forcing Foxconn to exploit its workers to make up for the less favorable (in terms of profit) terms. I'd like to know if that's actually the case, or if the Foxconn workers that supply other large companies are being treated basically the same. Here's a list I found recently:

"Foxconn's clients include Acer,, Apple, Cisco, Dell, Hewlett-Packard, Intel, Microsoft, Motorolla, Nintendo, Nokia, Samsung, Sony, Toshiba, and Vizio."

If it's the case, which I doubt very much, that Foxconn doesn't exploit workers making products for any of the other companies in that list, then I will be very surprised.

"We basically took a look at this situation and said, this is bullshit." -- Newegg Chief Legal Officer Lee Cheng's take on patent troll Soverain

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